Living in a world of dependency on the salary is monotonous but also becoming a new normal for this generation. Making all the decisions on needs, requirements, and wish based on the amount of salary is gloomy and demotivating as well. The wish list of this generation is being limited due to the paychecks and is building up a level of stress among all.
With the pandemic situation coming into the frame, this dependency has grown strong as the global economy suffered huge losses during this time and still hasn’t recovered completely. But this doesn’t justify the limitations to living life off paychecks only and not wanting to live a few dreams and tick a few things off the wish list.
The consumer is suffering and requires a better solution, and with the evolution of fintech, such a solution has been in expectation for a long time. One solution had come across as Credit Cards which worked out quite well for a while but with the changing needs, this also needed to change.
Among these circumstances, a new solution has gained the limelight of the fintech world, and this solution is called Buy Now Pay Later (BNPL). Although the name itself drops a few hints just to clarify, BNPL services allow the user to buy now and pay for it after some time.
BNPL is short-term financing that offers its users the liberty to make purchases and make payments in the future with little or no interest on the amount. However, there are a few terms to this as well which might somewhat sound similar to those of the credit cards but are different in their ways. BNPL is also referred to as ‘point of sale installment loans’, as it is a kind of loan given to the customer.
There must be a few ideas going in your mind, but bring them to a halt, BNPL doesn’t provide things for free, instead, when you purchase something from an online or offline store while making the payment select the BNPL option and pay a small down payment of the entire payment and rest amount is paid in small easy installments with a little or no interest.
BNPL has recently gained some attention in the post-covid era as the global economy has been facing a hard time and now various BNPL service providers can be seen in the market. Some of them are ZestMoney, LazyPay, Slice, even e-commerce giant Amazon has also introduced its Amazon pay later option as a part of the ongoing BNPL service trend.
These services have worked to reduce the friction in the industry and have helped the SMEs significantly and have worked as a ray of hope for the startups. BNPL is becoming popular among the younger generation (Gen-Z) as their trust in the traditional banking systems is not much. And this option has provided them an alternative banking option along with providing them flexibility for payments while offering them total control over their finances.
All these factors together have contributed to the success and popularity of the BNPL service platforms and have made them available as an alternative payment solution for all. BNPL is becoming a vast and spreading area to talk about and discuss and is not possible to include all its aspects here only, other aspects of this topic will be discussed in the upcoming blogs.